Japan's Axed Olympic Stadium Plan A Warning For Boston

Japanese Prime Minister Shinzo Abe announced Friday that the country will nix plans for a controversial stadium that would have served as the centerpiece of the 2020 Olympics, as costs have soared past $2 billion.

Instead, the Japanese Olympic Committee will reopen bidding for a new stadium design and start from scratch in an effort to reduce costs. The move came after public opinion, which was never high when it came to the stadium’s cost or unique, bicycle helmet-shaped design, sank to incredible lows: According to a recent poll, 81 percent of the country’s residents opposed the price of the facility.

The original bid projected a $1 billion cost for the 80,000-seat stadium, but the price rose to more than double that in recent estimates. The updated $2.1 billion price tag would have made it the most expensive stadium in history.

Abe’s move may not save Japan much money. Olympic organizers and the plan’s architect have disputed the role of the design itself in the massive price escalation, and Japan's increasing construction and labor costs, which affected the helmet stadium's price, will still be an issue for a new project. A new stadium will now also face a tighter deadline, which could exacerbate cost pressures.

Beyond Japan’s borders, Tokyo’s stadium problems are yet another warning of what can go wrong in the time between a host city’s selection and the actual Olympics, especially as cities approach the International Olympic Committee’s September deadline for submitting bids to host the 2024 Olympics.

Olympic costs exceed original expectations “with 100 percent consistency,” a study from the University of Oxford revealed last year. The authors looked at every Olympics from 1961 to 2012 and found that the games exceeded their projected price by an average of 179 percent.

For Olympic stadiums specifically, overruns “don’t happen every time, but it happens most of the time,” said sports economist Andrew Zimbalist, the author of Circus Maximus, a book critical of the “economic gamble” of hosting mega-events like the Olympics and World Cup.

This is especially pertinent in Boston, where there is already ample debate over the city’s efforts to host the 2024 Olympics. Bid organizers there insist they can produce the games on a budget, and they released an updated proposal last month for a $4.6 billion Olympic bid with a $1.2 billion stadium at its heart. (The stadium's price has already nearly doubled from the initial bid proposal, though that first bid included some money to cover cost increases.) Organizers have also promised the games will not leave local taxpayers on the hook for cost overruns.

“It’s nice rhetoric,” said Zimbalist, who has publicly criticized the Boston bid and the promises of taxpayer protections. “The fact that they say it doesn’t mean they can do it.”

Japan’s woes provide another window into the risk of that sort of agreement. Now that the IOC has awarded Tokyo the Olympics, the country has no real choice but to build a stadium. Japan's hands are tied, especially as it already demolished a previous Olympic venue that could have been updated at a cheaper price, and will likely end up absorbing significant costs no matter how it moves forward.

If Boston organizers are confident they can pull off an Olympics without major overruns that land at the feet of taxpayers, Zimbalist said, they should take their bid to the IOC and assure it that there is no need for the public to guarantee the costs. But that would render the bid hopeless, as even an IOC more mindful of public opposition to rising costs in Brazil, Japan and elsewhere would never assume the risk of overruns that are almost sure to come.

“Instead, the people who have to take their word for it are the taxpayers,” Zimbalist said.